USDA FOREST SERVICEL--.oc.,u_.,rc.BULLETIN NC°42

Some TRENDS intimber harvested and

o

stumpnge prices David C. LothnerEdwin KallioDavid T. Davis

North Central Forest Experiment StationForest Service, U.S. Department of Agriculture

ACKNOWLEDGMENT

The authors wish to thank the individual countyland commissioners and auditors, the office of IronRange Resources and Rehabilitation, and the Min-nesota Department of Natural Resources for theircooperation.

North Central Forest Experiment StationRobert A. Hann, Director

Forest Service a U.S. Department of Agriculture1992 Folwell Avenue

St. Paul, Minnesota 55108Manuscript approved for publication March 26, 1979

1979

MINNESOTA'S TAX-FORFEITED LAND: SOMETRENDS IN TIMBER HARVESTED AND

STUMPAGE PRICES

David C. Lothner, Economist,Edwin Kallio, Principal Market Analyst,and David T. Davis, Forestry Technician

Duluth, Minnesota

The area of commercial forest land in Minnesota harvested from county-administered land and to

has been decreasing steadily during recent years. 1 highlight the significant changes for the 1960-Consequently, interest has been increasing in the 1975 period.availability of timber from all land -- both publicand private. And tax-forfeited land is no excep-tion. 2 Concern focuses on the following questions: All County TrendsHow much timber has been harvested from tax-forfeited land in Minnesota? What direction will Total timber harvested from tax-forfeited landharvest trends take in the future? Could these in the 16 northern Minnesota counties- Aitkin,trends be markedly increased if greater invest- Becker, Beltrami, Carlton, Cass, Clearwater,ments were made in county forest land? Answers Cook, Crow Wing, Hubbard, Itasca, Koochiching,to these questions are difficult to secure. However, Lake, Mahnomen, Pine, St. Louis, Wadena -- in-some insight can be gained by examining past creased from 145,000 cord equivalents in 1960 totrends in harvest levels from county land. a'4 235,000 cord equivalents in 1975 (fig. 1)5. AI-

though vacillating from year to year, the averageThe purpose of this bulletin is to illustrate re- rate of increase in total harvest averaged about 3

cent trends in the volume and value of timberpercent annually. Most of the timber harvested ispulpwood, but some sawtimber and bolts are also

IUnpublished 1975 Minnesota forest inventory harvested. For example, in 1975, the 235,000 cordresults by the North Central Forest Experiment equivalents consisted of 213,600 cords ofStation. pulpwood, 13,000 cords of bolts, and 8.5 million

2This land, although commonly referred to as board feet ofsawtimber. The all-time peak harvestcounty land, is actually state land held in trust for during the period was 319,000 cord equivalents inthe county governments. The land was once pri- 1974. This occurred simultaneously with the rapidvately owned and went tax delinquent when the economic expansion in the total economy prior toowners failed to pay the property taxes. Thus, it the 1975 recession.forfeited back to the state, which gave the provision Throughout the period, the harvest offor its management to the counties, hardwoods exceeded that of softwoods. The

aStone, Robert N. 1966. A third look at Minneso- hardwoods increased from almost 84,000 cords or

ta's timber. U.S. Dep. Agric. For. Serv., Resour. 58 percent of the total harvest in 1960 to 167,000Bull. NC-1, 64p. U.S. Dep. Agric. For. Serv., North cords or 71 percent of the total harvest in 1975. TheCent. For. Exp. Stn., St. Paul, MN. average rateofincreaseinhardwoodharvestaver-

4Lothner, David C., Edwin Kallio, and David T. aged about 5 percent per year for the period. AspenDavis. 1978. Minnesota's tax-forfeited land: sometrends in acreages, sales, and prices. U.S. Dep. 5Statistics are based on data collected from theAgric. For. Serv., Resour. Bull. NC-37, 6 p. U.S. Iron Range Resources and Rehabilitation Board,Dep. Agric. For. Serv., North Cent. For. Exp. Stn., State of Minnesota and the individual countySt. Paul, MN. offices.

has always been the number one species harvested 1,_._o I Iin terms of volume. Almost 76,000 cords or 93 jpercent of the hardwood volume harvested in 1960was aspen. By 1975, 146,000 cords of aspen were _ i _ _u,harvested and this represented about 88 percent ofthe hardwood volume. Therefore, the hardwoodsother than aspen appear to be gaining but are still - _ __. /of minor importance.

ca

1,000,000--

-'_"_ I" "%,. 1960 1962 1964 1966 1968 1970 1972 1974 1976_,.,..,.,,,,.,,,.,,,,,,,..,..._. u ,sB

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: lO0.0o0-. ,.---__ _ "'"F_ _ .... Figure 2.-- Value of all species of timber harvested""/ fro tax-forfeito _ _-- m ed land in 16 northern Minnesota

counties, 1960-1975.

Through the 1960's, the value of timber harvestedin actual dollars remained essentially constant at

_0.000- around $300,000 per year and then in the 1970's1960 1962 1964 1966 1968 1970 1972 1974 1976

began increasing sharply.Figure 1._All species of timber harvested from

county land in 16 northern Minnesota counties, Most of the timber was sold informally upon1960-1975. request of loggers at appraised values determined

by the county land department. Thus, there hasbeen little competition based upon price for thismaterial. Only four of the counties -- Cass, Clear-water, Koochiching, and St. Louis -- were selling

In 1960, about 61,000 cord equivalents of timber on an auction basis and only Cass Countysoftwood were harvested; in 1975, almost 68,000 used the auction sale to any significant degree.cord equivalents were harvested. Thus, the aver- Thus, it is not surprising that the stumpage priceage rate of increase in the softwood harvest was < 1 of timber sold aggregated and weighted for allpercent per year. However, looking at the entire species has increased little in actual dollars andperiod, the softwood harvest declined from 1960 to decreased in real (deflated) dollars.1968 to a low of 44,000 cord equivalents and thensteadily increased at a rate of about 6 percent from During the 1960's the average price of timber per1968 through 1975. unit harvested actually decreased- from $2.15

per cord in 1960 to about $1.75 per cord in 1969 (fig.In contrast with the hardwoods, no single domi- 3). After 1969, the value per cord in actual dollars

nant softwood species was harvested. Jack pine, began increasing and was $2.85 by 1975.balsam fir, and the spruces are presently ranked inthat order, accounting for 37, 34, and 18 percent of This trend is primarily due to: (1) a shift in thethe total softwood harvest, respectively. Thus, type of wood harvested -- proportionally more low-these three account for about 89 percent of the value hardwoods (mainly aspen) and less high-total softwood harvest. (See the Appendix for a value softwoods; and (2) the stumpage price of thetabular breakdown, of individual species harvested more valuable softwood species (red and white pine,by year.) jack pine, spruce, and balsam fir) remained essen-

tially constant throughout the 1960's and increas-The stumpage value of timber harvested in ac-tual dollars from tax-forfeited land increased from ing in actual dollars only in the 1970's (fig. 3).about $310,000 in 1960 to about $671,000 in 1975 When the harvest is valued in real dollars using(fig. 2). Most of this increase took place after 1969. the wholesale price index for all commodities as a

deflator (base year is 1967), the trends in stumpage The big four counties, both in terms of area andprice become even more startling. The average harvest volumes (St. Louis, Itasca, Koochiching,price per unit aggregated and weighted for all and Cass), all increased their hardwood harvestspecies actually decreased in real dollars through- share with respect to their total harvest during theout the entire period. It was $2.27 per cord in 1960 period. They began the period with hardwood(1967 dollars) and decreased steadily to $1.63 per shares ranging from 45 to 60 percent and endedcord by 1975. Again, the same two factors the period with hardwood shares ranging from 70influence the decrease. First, the type of wood har- to 75 percent. Three of the big four counties had avested shifted to proportionally more of the low- substantial increase in the average annual rate ofvalue hardwoods and less of the high-value hardwood harvest. Cass County averaged 16 per-softwoods. Second, the stumpage price in real dol- cent followed by Koochiching (9 percent), andlars remained essentially constant or slightly Itasca (6 percent). St. Louis County, along withdeclined throughout the entire period for the more Aitkin and Beltrami, showed no discernable trend.valuable softwood species.

Only Cass and Koochiching Counties increasedtheir softwood harvest during the period and both

Individual County Trends had average annual rates of increase of about 6percent. Itasca County averaged a 7 percent rate of

The annual volumes of timber harvested from decrease for the first l0 years and averaged a 10tax-forfeited land within individual counties dif- percent rate of increase for the last 5 years. Still,fered greatly from year to year as well as from Itasca County was harvesting less softwoods at thecounty to county. Six counties accounted for 81 end than it was at the beginning of the period.percent of the total timber harvested from tax- Beltrami County had little discernable softwoodforfeited land in 1975: Koochiching, 60,000 cords; harvest trend although it fluctuated sharply fromSt. Louis, 43,000 cords; Itasca, 40,000 cords; Cass, year to year. The softwood harvest in both Aitkin29,000 cords; Beltrami, 14,000 cords; and Aitkin, and St. Louis Counties decreased an average of10,000 cords, about 3 percent per year during the period.

Timber volume harvested in St. Louis, Beltrami,The average stumpage price trends for alland Aitkin Counties fluctuated from year to year

but showed no discernable trend for the 1960 timber sold by the individual counties is not sub-through 1975 period (fig. 4). Timber volume har- stantially different than the trend for all sixteenvested in Cass, Koochiching, and Itasca Counties, counties combined. Of the six counties that ac-on the other hand, increased at an annual rate ofl2, counted for most of the timber harvested,8, and 3 percent, respectively, during the period five- Aitkin, Cass, Itasca, Koochiching, and St.(fig. 4). Louis -- had a decreasing average stumpage price

per unit in actual dollars during the 1960's (fig. 5).Many of the other northern Minnesota counties Only Beltrami County, which had alternating

have been developing their timber management periods of softwoods and then hardwoods predomi-programs and together make a significant contrib- nating its annual harvest, had average stumpageution to the total timber harvest, prices with no discernable trend during the 1960's

How do these six individual counties compare (fig. 5). Average stumpage price increased for allwith respect to the hardwood and softwood harvest six counties in the 1970's.mix? Aitkin, Koochiching, and St. Louis Counties

harvested more hardwoods than softwoods each When the harvest is valued in real dollars, usingyear during the period. In 1960, the softwood har- the wholesale price index for all commodities as avest in Itasca and Cass Counties was slightly deflator, the average stumpage price trends for thehigher than the hardwood harvest, but by 1965 in individual counties again is similar to the trend

Itasca County and 1969 in Cass County hardwoods for all 16 counties combined. All counties, excepthad become the predominant species group. In Bel- Beltrami which shows no discernable trend, havetrami County hardwoods and softwoods alternated a decreasing average stumpage price throughoutas the predominantly harvested species group, the period.

No discernable trend is apparent for the aver- Aitkin and Cass Counties decreased in the 1960's

age stumpage prices in actual dollars for the indi- before increasing in the 1970's to early 1960 levelsvidual softwood species within each county in the by 1975. A further review of the information in1960's followed by an increasing trend in the figures 4 through 10 will permit the reader to1970's (figs. 6, 7, 8, and 9). However, there are make additional observations about the counties.some notable exceptions. (1) The stumpage pricesfor the red and white pine, jack pine, and sprucecategories in Beltrami County vary from the all- In summary, the total volume of timber har-

l county aggregates. Red and white pine and jack vested on county-administered tax-forfeited landpine prices vary greatly from year-to-year in the has increased significantly from 1960 to 1975,i 1970's and show no discernable trend. Spruce This was primarily due to the increased harvest of

prices appear almost constant with a sharp drop in aspen. Prices paid for stumpage generally did not1975. (2) Jack pine stumpage prices in St. Louis change throughout the 1960's and increasedCounty show no increase in the 1970's so no dis- slightly in the 1970's. When these prices are de-cernable trend is apparent throughout the 1960 to flated to indicate real dollars, prices have actually1975 period. (3) Balsam fir stumpage prices in declined slightly throughout the entire period.

APPENDIXTOTAL TIMBER HARVESTED

(Cords)Sum of16NorthernMinnesotaCounties

SOFTWOODS

RedandWhite Jack Balsam Total ;. 'i::Year Pine Pine Spruce Fir Tamarack Cedar Softwoods

1960 2,116 23,113 13,976 18,339 2,374 1,326 61,2441961 2,549 21,542 16,038 17,959 5,449 544 64,0811962 2,926 26,639 11,228 13,923 2,717 16 57,4491963 2,831 23,661 13,596 15,051 5,762 90 60,9911964 4,269 19,371 14,206 11,623 4,747 73 54,2891965 1,700 15,543 8,245 10,908 2,683 58 39,1371966 1,678 22,781 10,375 15,612 1,665 264 52,3751967 4,068 19,540 10,959 9,563 6,414 99 50,6431968 3,747 22,881 6,875 6,015 4,250 285 44,0531969 3,354 25,562 7,759 5,040 2,741 324 44,7801970 3,280 23,753 8,139 7,173 4,947 195 47,4871971 4,664 26,383 10,042 7,592 4,988 922 54,5911972 6,156 25,526 10,618 11,380 1,743 340 55,7631973 6,636 38,534 13,895 13,749 2,741 913 76,4681974 5,918 24,676 14,989 17,277 2,652 1,378 66,8901975 4,137 25,301 12,308 22,857 2,169 1,123 67,895

HARDWOODS

Other Total TotalAllYear Aspen Birch Ash Oak Basswood Hardwoods Hardwoods Species1960 77,654 1,454 1,102 818 1,812 712 83 552 1447961961 65,248 3,749 897 1,595 2,449 1,154 75 092 139173 :1962 88,327 2,056 768 603 2,591 1,703 96048 153497 _,1963 87,833 2,409 785 2,054 1,509 1,847 96437 1574281964 82,127 1,851 1,150 974 1,768 1,761 89631 143920

1J 1965 94,879 1,171 942 1,059 851 7,412 106314 145451

I 1966 110,301 870 1,505 786 623 3,317 117402 1697771967 122,545 1,803 1,691 904 818 3,781 131542 182185t 1968 117,638 1,355 2,084 528 803 1,684 124092 168145

1969 127,247 867 1,105 668 470 3,814 134171 1789511970 120,366 5,335 1,832 547 723 3,715 132518 1800051971 119,516 6,163 1,739 1,834 921 4,858 135,031 1896221972 141,708 8,643 1,118 1,619 499 5,188 158,775 214,5381973 171,646 7,189 1,517 1,189 341 17,271 199,153 275,6211974 225,507 10,896 2,043 1,158 1,048 11,416 252068 318,9581975 146,360 8,054 1,504 1,855 371 9,097 167241 235,136

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12

Lothner, David C., Edwin Kallio, and David T. Davis.1979. Minnesota's tax-forfeited land: some trends in timber harvested

and stumpage prices. U.S. Dep. Agric. For. Serv., Resour. Bull. NC-42,12 p. U.S. Dep. Agric. For. Serv., North Cent. For. Exp. Stn., St. Paul,MN.

The volume of timber harvested from Minnesota tax-forfeited landincreased from about 145,000 cord equivalents in 1960 to 235,000 cordequivalents in 1975. Actual prices paid for stumpage decreasedslightly in the 1960's and increased in the 1970's. However, in deflateddollars, stumpage prices decreased slightly throughout the period.

OXFORD: 652.51:922.2(776). KEY WORDS: Counties, northern Min-nesota, timber utilization.

Lothner, David C., Edwin Kallio, and David T. Davis.1979. Minnesota's tax-forfeited land: some trends in timber harvested

and stumpage prices. U.S. Dep. Agric. For. Serv., Resour. Bull. NC-42,12 p. U.S. Dep. Agric. For. Serv., North Cent. For. Exp. Stn., St. Paul,MN.

The volume of timber harvested from Minnesota tax-forfeited land

increased from about 145,000 cord equivalents in 1960 to 235,000 cordequivalents in 1975. Actual prices paid for stumpage decreasedslightly in the 1960's and increased in the 1970's. However, indeflateddollars, stumpage prices decreased slightly throughout the period.

OXFORD: 652.51:922.2(776). KEY WORDS: Counties, northern Min-nesota, timber utilization.

,_t trash in the proper place_